"Overnight, The World Became The Twilight Zone" - Exodus From Cities Sparks Mountain-Dweller Greatest Fear

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"Overnight, The World Became The Twilight Zone" - Exodus From Cities Sparks Mountain-Dweller Greatest Fear

Social distancing is transforming society as we know it. City dwellers are packing up their bags and are heading for the mountains amid the virus crisis.  

"Overnight, the world took a sharp turn into the Twilight Zone," Gina Grande told the Los Angeles Times. "I had to get out of there. So, I made a beeline to my boss' office and said, 'Th

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is is awkward, but can I please telecommute from Southern California?'" 

Grande, terrified of the fast-spreading COVID-19 outbreak in San Francisco, which is where she works and lives, left the metro area for her second home on the outskirts of Joshua Tree National Park, a desert area located in southern California. 

As the pandemic sweeps across California's largest cities, residents are fleeing their urban settings to isolated communities in the Mojave Desert or the rugged Sierra Nevada. The hope is that a remote area can reduce their transmission risk. 

But for some, social distancing measures enforced by the government have not just limited their mobility to and from work and or even their ability to go outside, residents in Los Angeles last week were restricted from leaving the city to vacation homes. 

In Mammoth Lakes, a town in California's Sierra Nevada mountains, banned non-residents because infection risk in the small community would quickly overwhelm their hospital system. 

The flight from cities to rural communities during the outbreak, ignited by fear, could be the next hottest trend for real estate that revives dying suburbs. Families, who've been subjected to chaos at Costco stores of panic hoarding or forced quarantine in their tiny 550 square-foot studios, want the freedom of rural communities and the security of land that could power them through any crisis. 

In Joshua Tree, vacation rental companies have said concerned families from large metro areas are renting short-term rentals for weeks and or months at a time following the virus outbreak. 

"We just confirmed two rentals for long-term stays over three weeks," said Josh Sonntag, who operates several rental units in the area. "In both cases, social distancing and the ability to work remotely was important."

Bryan Wynwood, the owner of Joshua Tree Modern Real Estate, said, "Every call I get is related to the coronavirus. Some of them are from city dwellers worried about being stuck in the center of a metropolis that loses control of its basic public services."

Sam Steinman, 28, owns several short-term rentals in Joshua Tree, said he'd noticed the desperation in city dwellers' voices who are willing to pay double for his properties to escape the outbreak in large cities. 

"I've seen this kind of fear and desperation before in Israel during rocket attacks," Steinman said. "A friend recently asked if I had a gun he could borrow. I said absolutely not."

And maybe, just maybe, COVID-19 will have a long-lasting impact on choices made by city dwellers, who have just realized their entire lives can come crashing down in a public health crisis - though, some are making a mad dash to remote areas where life goes on as usual. 

A noticeable trend is developing: A revival of dying suburbs could be on the horizon as cities are just too dangerous when everything goes to sh*t. 

If you’re looking to flee a metro area, not just because of a virus crisis, but also because housing prices in cities are due for a major correction, here are some affordable suburbs in America that you might find interesting.

Tyler Durden

Wed, 03/25/2020 - 20:10

Stocks Scream Higher On Greatest Short-Squeeze In History, Bonds & Bullion Shrug

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Stocks Scream Higher On Greatest Short-Squeeze In History, Bonds & Bullion Shrug

"Fear" is almost over according to the market's "Virus Fear" trade...

Source: Bloomberg

The Dow is up by almost 18% in the last 2 days - the biggest 2-day surge since March 1933...

Source: Bloomberg

And Dow futures are up a stunning 20% from the limit-down l

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ows on Sunday night...

But bonds ain't buying it...

Source: Bloomberg

So, with stocks roaring higher once again, this seemed appropriate...

"Most Shorted" stocks are up a stunning 21% in the last two days - the greatest short-squeeze in history...

Source: Bloomberg

Dow futures show the insane scale of today's moves best - a 1000 point surge into yesterday's close, a failed 1000 point surge overnight (on the "deal"), another failed 1000 point surge into and through the cash open, and then a 1500 points surge that held into the close...

BUT - Things "went a little bit slightly turbo" into the close as Bernie Sanders spoiled the party by threatening to hold up the vote on the bill...

Knocking stocks lower and sending Nasdaq red on the day...

AAPL also did not help as reports came out that it may delay its 5G phone...

However, on the last two days, stocks are up strong...

Airlines, Cruise operators, and restaurants all soared massively today again...

Source: Bloomberg

Boeing was the most ridiculous of all stocks...

Source: Bloomberg

There's nothing like a government handout to make everything better! What a farce!

VIX and stocks have decoupled (are people seriously buying calls to lever-up into this rebound? Or is this hedgers?). VIX was unchanged today as stocks soared...

Source: Bloomberg

Treasury yields were mixed today - short-end bid (less than 5Y -2bps), long-end offered (30Y +2bps), belly flat but relative to stocks huge moves, bonds basically shrugged...

Source: Bloomberg

Starting at around 1400ET, someone decided to dump the long-bond hard...

Source: Bloomberg

US T-Bills have negative yields out to the end of the year...

Source: Bloomberg

Both HY and IG bonds rallied today (thogh HYG rolled over late on as LQD was bid into the close)...

Source: Bloomberg

Before we leave bond-land, it is worth pointing out that the number of bonds trading at a spread over 1,000 bps (the barometer of distress) neared 1,900 this week - the highest since 2009, data compiled by Bloomberg show. It was less than 300 at the start of March.

Source: Bloomberg

As Bloomberg noted, the spread on the entire junk bond index flipped above 1,000 bps on Friday, and strategists expect it to exceed 1,200 bps soon. In addition, there’s a whole world of grief in the $1 trillion leveraged-loan market, which is trading on average below 80 cents on the dollar, a level typically associated with distress.

But, HYG - the HY Bond ETF - has screamed higher today, back into a huge premium to underlying NAV...

Source: Bloomberg

The Dollar tumbled for the second day in a row (after 11 days straight up)...

Source: Bloomberg

Cryptos broadly slipped lower today...

Source: Bloomberg

Someone was bidding oil again during the US session...

Source: Bloomberg

Spot Gold and futures remain decoupled though the spread did compress from their extremes yesterday...

Source: Bloomberg

Palladium exploded higher today (though all PMs are notably higher since The Fed went "all-in")...

Source: Bloomberg

After surging Tuesday, Palladium futures in New York skyrocketed 26% Wednesday, the biggest gain in records dating back to 1986.

Finally, we've seen this all before... As Bloomberg details, historically expectations are low after a big rally. The 9.4% jump in the S&P 500 yesterday was the 10th largest in history. The benchmark S&P fell seven of the previous nine times with an average loss of 0.7%.

While the most intense sell-off may be behind us, there’s still room for the markets to fall. For one, the current drawdown is 34%. It is less than the peak-to-trough falls in the previous crises, including the 57% slump in 2008-2009, the 49% drop after the burst of the dot.com bubble and the 48% retreat during the 1973 oil crisis.

And for now, it appears the 1929 analog is holding up...

Source: Bloomberg

It’s certainly good news that the fiscal stimulus of more than $2 trillion is on the verge of getting passed in Congress. But the stimulus and various Fed actions are necessary but insufficient conditions for the market to bottom, and worse still, the dollar funding crisis is rapidly re-accelerating as month-end looms... having erased all of the 'improvement' offered by The Fed...

Source: Bloomberg

And don't forget - tomorrow is jobless claims and it's going to be a doozy!

If all of that doesn't scare you - this should - the sovereign credit risk of the USA is surging higher since helicopter money began to creep into reality...

Source: Bloomberg

Tyler Durden

Wed, 03/25/2020 - 16:03

"Greatest Depression Has Already Started", Celente Warns

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"Greatest Depression Has Already Started", Celente Warns

Via Greg Hunter’s USAWatchdog.com,

Gerald Celente, a top trends researcher and Publisher of The Trends Journal, says the world is already in an economic depression.

Celente explains, “Never in the history of the world has the whole world, or most of the world, been shut down by politicians destroying people’s lives and thei

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r businesses..."

"People are going to go bankrupt. You are going to see suicide rates increase. You are going to see crime escalate and people OD’ing on drugs because of depression...

Our leaders are totally closing down the economy. Again, this has never been done before. It’s not only Wall Street going down, Main Street went down simultaneously. That is unprecedented. Usually, the markets go down and then the ripple effects start hitting Main Street. This time–boom, they are both down...

It’s going to be worse than the Great Depression. It’s going to be the Greatest Depression.”

What’s the biggest problem the economy faces? Celente says,

The debt levels are phenomenal. We have more than $250 trillion of global debt and all the personal debt. How are you going to pay the credit card debt? How about paying the student debt, car loans and the mortgages? What about the electric bill, phone bill and people are out of work because my governor said I should stay home?”

The next play by global governments is to get rid of cash because it carries germs like the coronavirus. Celente says,

“We are going to go from ‘Dirty Cash to Digital Trash,’ which is also the title of the current Trends Journal. They’ve got people freaked out. They are going to give us digital trash. That’s what they are doing. They are going to get rid of the currencies that you have.”

After talk of trillions of dollars in new stimulus from Congress this week, what about gold prices? Celente says,

“You saw how much the markets went up. How about gold prices? It bounced back $200 per ounce since Friday... The smart money is seeing the fake money being printed, and they are going into gold.

Now hear this. Just like the crummy, slimy politicians going after your Constitutional rights and Bill of Rights, they are going to go after your gold. They did it in the last Great Depression, and they are going to do it in the Greatest Depression. You mark my words.”

In closing, Celente says, “I agree with Trump 100% because I have been saying this since the beginning that the cure is going to be worse than the disease..."

"They are destroying the global economy. They are destroying people’s lives. We are going to see crime levels that are unimaginable. Why do you think people are going out and getting guns? Then you are going to see these liberals talking about gun confiscation. Crime is going to escalate, and deaths are going to go through the roof. When people lose everything and have nothing left to lose, they lose it. You are going to see gangs like never before. On the other end, the open borders issue, that is a closed story. They are closing borders all over the world. So, you are not going to hear people say let them in, let them in–that’s over. I agree with Trump. We should go back to business as usual.”

On Trump winning a second term this November, Celente, who calls himself a “political atheist,” says, “It’s a wild card, but I would still go with Trump at this point.”

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Gerald Celente, Publisher of The Trends Journal, as he gives his top trends and predictions for the virus crisis, the Greatest Depression, gold and silver prices and his pick to win the White House in November.

*  *  *

To Donate to USAWatchdog.com Click Here

Tyler Durden

Wed, 03/25/2020 - 14:05

The Greatest Gold Quotes Of All Time

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The Greatest Gold Quotes Of All Time

Via SchiffGold.com,

People have treasured gold for millennia. They’ve draped it over the bodies. They’ve used it as money. They’ve even adorned their tombs with the yellow metal. As beloved as it is, it should come as no surprise that gold has been the subject of many famous quotes.

So, what are the greatest quotes featuring gold of all time? We w

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anted to find out so we held a contest. The prize – once ounce of pure gold.

Roy Sebag ran the contest through his Twitter account. Roy is the founder of GoldMoney, and SchiffGold is part of the GoldMoney family.

The contest was pretty simple. Respond to Roy’s tweet with a name and original quote by a historic figure in relation to gold.

The response was fantastic. Over 500 people responded with quotes. Roy picked the top four and drew the winner out of a hat.

And the winner was…

“Love is the soul’s electric flame,
And gold its best conductor.” -Robert Burns

The quote comes from a poem.

She asked why wedding rings are made of gold;

I ventured this to instruct her;

Why, madam, love and lightning are the same,

On earth they glance, from Heaven they came.

Love is the soul’s electric flame,

And gold its best conductor.

The other finalists were as follows.

“Gold loves to make its way through guards, and breaks through barriers of stone more easily than the lightning’s bolt.” – Horace

“Truth, like gold, is to be obtained not by its growth, but by washing away from it all that is not gold.” – Leo Tolstoy

“Only as an image of the highest virtue did gold get to be the highest value. The giver’s glance gleams like gold. A golden brilliance concludes the peace between the moon and the sun. Uncommon is the highest virtue and useless, it is gleaming and gentle in its brilliance.” – Nietzsche

“The return on gold does not depend on the fulfillment of some material condition. It is an ideological problem. It presupposes only one thing: the abandonment of the illusion that increasing the quantity of money creates prosperity.” Ludwig von Mises

And here are some more of the greatest gold quotes.

“Let us rejoice that we are poor, And have no gold to keep: We do not need to bar the door Ere we can go to sleep.” -Robert Leighton

“Gold is money. Everything else is credit.” – J.P. Morgan

“Brass shines as fair to the ignorant as gold to the goldsmiths.” – Queen Elizabeth I

“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.” – Norm Franz

“Gold — what can it not do, and undo?” — William Shakespeare

“We are often told that the Gold Standard will shackle us to the United States. I will deal with that in a moment. I will tell you what it will shackle us to. It will shackle us to reality. For good or for ill, it will shackle us to reality. – Winston Churchill

“The desire of gold is not for gold. It is for the means of freedom and benefit.” ― Ralph Waldo Emerson

“O Gold! I still prefer thee unto paper which makes bank credit like a bark of vapour.” – Lord Byron

“Because gold is honest money it is disliked by dishonest men.” – Ron Paul

“O Zeus, why is it you have given men clear ways of testing whether gold is counterfeit but, when it comes to men, the body carries no stamp of nature for distinguishing bad from good?” ― Euripides

“Everything has its limit- iron ore cannot be educated into gold.” – Mark twain

“Gold makes the ugly beautiful.” – Moliere

“[Gold] can be made either into bars, ingots, or coins…has no nationality [and] is considered, in all places and at all times, the immutable and fiduciary value par excellence.” – Charles de Gaulle

“When Gold argues the cause, eloquence is impotent.” — Publilius Syrus

“An inch of time is an inch of gold, but an inch of time cannot be purchased for an inch of gold. Pure gold does not fear furnace. Read critically, and you will find each word worth a thousand ounces of gold. Words are mere bubbles of water, but deeds are drops of gold.” – 中国谚语

“Gold was a gift to Jesus. If it’s good enough for Jesus, it’s good enough for me!” — Mr. T

“Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium.” -Murray Rothbard

“Now a river went out of Eden to water the garden, and from there it parted and became four riverheads. The name of the first is Pishon … where there is gold. And the gold of that land is good.” Moses, Genesis 2:10-12

“Gold is tried by fire, brave men by adversity.” -Seneca

“Stay gold Ponyboy.” – Johnny Cade in The Outsiders

“From a strictly economic point of view, buying gold in a major inflation and holding it probably presents the least risk of capital loss of any investment or speculation.” – Henry Hazlitt

“Dare to love yourself as if you were a rainbow with gold at both ends.” Author-Poet Aberjhani

Tyler Durden

Fri, 02/28/2020 - 21:05

The Greatest Swindle In American History... And How They'll Try It Again Soon

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The Greatest Swindle In American History... And How They'll Try It Again Soon

Via Doug Casey's International Man blog,

International Man: Before 1913 there was no income tax, and the United States was a much freer country. Initially, the government sold the federal income tax to the American people as something only the rich would have to pay.

Jeff Thomas: Yes, exactly. It always

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begins this way. The average person is always happy to see the rich taken down a peg, so this makes the introduction of the concept of theft by the government more palatable. Once people have gotten used to the concept and accept it as being perfectly reasonable, then it’s time to begin to drop the bar as to who “the rich” are. Ultimately, the middle class are always the real target.

International Man: The top bracket in 1913 kicked in at $500,000 (equivalent to around $12 million today), and the tax rate for it was only 7%. The government taxed those making up to $20,000 (equivalent to around $475,000 today) at only 1% – that’s one percent.

Jeff Thomas: Any good politician understands that you begin with the thin end of the wedge, then expand upon that as soon as you feel you can get away with it. The speed at which the tax rises is commensurate with the level of tolerance of the people. And in different eras, the same nation may have a different mindset. The more domination a people have come to accept from their government, the faster the pillaging can be expanded.

As an example, the Stamp Tax that King George III placed upon the American colonies in the eighteenth century was very small indeed – less than two percent – but the colonists were very independent people, asking little from the king in the way of assistance, and instead, relying upon themselves for their well-being. Such self-reliant people tend to be very touchy as regards confiscations by governments, and even two percent was more than they would tolerate.

By comparison, if today, say, Texas were to eliminate all state taxation and allow only two percent in federal taxation, Washington would come down on them like a ton of bricks, saying they were attempting to become a “tax haven.” They’d be accused of money laundering and aiding terrorism and might well be cut out of the SWIFT system. The federal government would shut down the state government if necessary, but diminished tax would not be tolerated.

International Man: Of course, once the American people conceded the principle of an income tax in 1913, the politicians naturally couldn’t resist ramping it up. Just look at the monstrosity that exists today in the US tax code, which most Americans passively accept as “normal.” It’s a typical example of giving an inch and taking a mile.

Jeff Thomas: Yes – the key to it is twofold: First, you have to be sensitive as to how quickly you can ramp up taxation, and second, that rate is directly proportional to the level that the public receive largesse from the government. They have to have become highly dependent upon a nanny state and thereby willing to take their whipping from nanny. The greater the dependency, the greater the whipping.

International Man: Homeowners in the US – and most countries – must regularly pay property taxes, which are taxes on property that you supposedly own. Depending on where you live, they can be quite high and never seem to go down. What are your thoughts on the concept of property taxes?

Jeff Thomas: Well, my view would be biased, as my country of citizenship has never, in its 500-year history, had any direct taxation of any kind. The entire concept of direct taxation is therefore anathema to me. It’s easy for me to see, simply by looking around me, that a society operates best when it’s free of taxation and regulation and people have the opportunity to thrive within a free market.

Years ago, I built my first home from my savings alone, which had been sufficient, because my earnings were not purloined by my government. I never paid a penny on a mortgage and I never paid a penny on property tax. So, following the construction of my home, I was able to advance economically very quickly. And of course, I additionally had the knowledge that, unlike most people in the world, I actually owned my own home – I wasn’t in the process of buying it from my bank and/or government.

So, not surprisingly, I regard property tax as being as immoral and as insidious as any other form of direct taxation.

International Man: Not all countries have a property tax. How do they manage?

Jeff Thomas: I think it’s safe to say that political leaders don’t really have any particular concern over whether a tax is applied to income, property, capital gains, inheritance, or any other trumped-up excuse. Their sole concern is to tax.

Taxation is the lifeblood of any government. Once that’s understood, it becomes easier to understand that government is merely a parasite. It takes from the population but doesn’t give back anything that the population couldn’t have provided for itself, generally more efficiently and cheaply.

So, as to how a government can manage without a property tax, we can go back to your comment that the US actually had no permanent income tax until 1913. That means that they accomplished the entire western expansion and the creation of the industrial revolution without such taxation.

So, how was this possible? Well, the government was much smaller. Without major taxes, it could become only so large and dominant. The rest was left to private enterprise. And private enterprise is always more productive than any government can be.

Smaller government is inherently better for any nation. Governments must be kept anemic.

International Man: The Cayman Islands doesn’t have any form of direct taxation. What does that mean exactly?

Jeff Thomas: It means that the driving force behind the country is the private sector. We tend to be very involved in government decisions and, in fact, generate many of the decisions. Laws that I’ve written privately for the Cayman Islands have been adopted by the legislature with no change whatsoever to benefit government. As regards property tax, there are only three countries in the western hemisphere that have no property tax, and not surprisingly, all of them are island nations: The Turks and Caicos Islands, Dominica and the Cayman Islands.

I should mention that the very concept of property ownership without taxation goes beyond the concern for paying an annual fee to a government. Additionally, in times of economic crisis, governments have been known to dramatically increase property taxes. Further, they sometimes announce that your tax was not paid for the year (even if it was) and they confiscate your property as a penalty. This has been done in several countries.

What’s important here is that, with no tax obligation, the government in question is unable to simply raise an existing tax. If you have no reporting obligation, you truly own your property. And you can’t be the victim of a “legal” land-grab.

Instituting a new tax is more difficult than raising an existing one, and instituting any tax in a country where direct taxation has never existed is next to impossible.

International Man: How do Cayman’s tax policies relate to its position as a business-friendly jurisdiction?

Jeff Thomas: Well there are two answers to that.

The first is that the Cayman Islands operates under English Common Law, as opposed to Civil Law. That means that as a non-Caymanian, you’re virtually my equal under the law. Your rights of property ownership are equal to mine. Therefore, an overseas investor, even if he never sets foot on Cayman, cannot have his property there taken from him by government, squatters, or any other entity such as can legally do so in many other countries.

The second answer is that, since we’re a small island group, the great majority of business revenue comes from overseas investors. Therefore, our politicians, even if they’re of no better character than politicians in other countries, understand that, if they change a law or create a tax that’s detrimental to foreign investors and depositors, wealth can be removed from Cayman in a keystroke of the computer. Before the ink is dried on the new legislation, billions of dollars can exit, on the knowledge that the legislation is taking place.

Now, our political leaders may not be any more compassionate than those of any other country. Their one concern is that their own bread gets buttered. But should they pass any legislation that’s significantly detrimental to overseas investors, their careers are over. They understand that and recognise that their future depends upon making sure that they understand and cater to investors’ needs.

International Man: Governments everywhere are squeezing their citizens through higher taxes and new taxes. And don’t forget that printing money, which debases the currency, is also a real, but somewhat hidden, tax too.

What do you suggest people do to protect themselves?

Jeff Thomas: Well, the first thing to understand is that many nations of the world grabbed onto the post-war coattails of the United States. The US was going to lead the world, and Europe, the UK, Canada, Australia, Japan, etc., all got on board for the big ride to prosperity. They followed all the moves the US made over the decades.

Unfortunately, once they were on board the train, they couldn’t get off. When the US went from being the largest creditor nation to the largest debtor nation, those same countries also got onto the debt heroin.

That big party is coming to an end, and when it does, all countries that are on the train will go over the cliff. So, what that means is that you, as an individual, do not want to be on that train. If you’re a resident of an at-risk country, you want to, first and foremost, liquidate your assets in that country and get the proceeds out. You may leave behind some spending money in a bank account – so that you have the convenience of chequing, ATMs, etc. – and that money should be regarded as sacrificial.

You then would want to move the proceeds to a jurisdiction that’s likely to not only survive the train wreck but prosper as a result of it. Once it’s there, you want to keep it outside of banks and in forms that are difficult to take from you – cash, real estate and precious metals.

After that, if you’re able to do so, it would be wise to also get yourself out before a crash, as the day will come when migration controls will be imposed and it will no longer be legal to exit.

It does take some doing, but if faced with a dramatic change in life, I’d want to be proactive in selecting what was best for me and my family, before the changing socio-economic landscape made that choice for me.

*  *  *

Governments everywhere are squeezing their citizens through increased taxation and money printing - which is a hidden tax. This trend will only gain momentum as governments go broke and need more cash. Most people have no idea what really happens when a currency collapses, let alone how to prepare. That’s precisely why bestselling author Doug Casey and his team just released this new video. It shows how it could all go down, and what you can do about it. Click here to watch it now.

Tyler Durden

Sat, 11/23/2019 - 18:30



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Gold & Silver Price Manipulation: The Greatest Trick Ever Pulled

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Submitted by Ronan Manly, BullionStar.com

There is probably no other topic in the gold and silver markets which incites heated debate more than the subject of precious metals price manipulation.

That prices in the precious metals markets are manipulated is not speculation, it is fact, a fact made clear again recently by the Commodity Futures and Trading Commission´s (CFTC) ruling against investment bank Merrill Lynch Commodities Inc (MLCI) for spoofing pricing of gold and silver futures contracts on the COMEX exchange.

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br />

The number of investigations, legal cases, class actions and financial headlines involving precious metals manipulation are now so pervasive that it’s hard to keep track of which cases are in motion and which investment banks are under scrutiny at any given time.

But beyond the profit and greed driven bullion bank manipulations gold and silver prices, there is also the issue of central bank policy interventions to suppress the gold price by outright gold sales or using the opaque and secretive gold leasing and lending market. This is a less talked about manipulation given the secrecy of everything to do with central banks and gold, as well as a reluctance of the financial media to broach the subject and a reluctance of regulators to ´go there´ by even looking at central bank gold market activities.

That central bank operations in the gold market have existed is also fact, with such operations covering price smoothing and price stabilization, price pegging, and coordinated gold pools. See BullionStar articles “New Gold Pool at the BIS Basle, Switzerland: Part 1” and “New Gold Pool at the BIS Basle: Part 2 – Pool vs Gold for Oil” and “The Bank of England and the London Gold Fixings in the 1980s” for more background. There is also ample evidence about central bank manipulation documented in various places including on the GATA website. The motivations for such central bank interventions include protecting the existing financial system, engineering low real long term interest rates, and preventing gold acting as a barometer of inflation.

But beyond even commercial bank manipulation of gold and silver metals prices and central bank policy manipulation of gold, there is arguably another form of manipulation in the precious metals markets which is far more influential in subduing price discovery and which takes the form of the very structure of how these markets trade vast quantities of futures contracts and synthetic and paper gold and silver positions that are completely unconnected with any underlying physical metal. The home of this trading is of course on the US COMEX exchange and the unallocated gold and silver markets in London. Both venues of which are ruled by the LBMA bullion banks.

Blundering Herd – Merrill Lynch Commodities Inc

Merill ´Spoofing´ Lynch

Turning first to the recent Merrill Lynch case, in late June this year the CFTC announced that it had fined Merrill Lynch Commodities Inc (MLCI) $25 million for manipulating gold and silver futures contracts on the COMEX exchange between 2008 and 2014. This was done ‘thousands of times’ according to the CFTC, by MLCI traders ‘spoofing’, or placing and then cancelling orders before they were executed. By creating artificial demand or supply and thus false prices, this interfered with the (already broken) precious metals price discovery that would have otherwise occurred.

Interestingly though not surprisingly, much of the direct evidence the CFTC used in its verdict was from the myriad log files of trader chat apps which were used to coordinate the spoofing. For example, in one 2010 chat, a trader was quoted as saying “guys the algos are really geared up in here.  [I]f you spoof this it really moves . . .”.

While a lot of money for most people, a $25 million fine is a paltry amount for a global investment bank such as Merrill Lynch and is just a cost of doing business on bank-ruled Wall Street. However, the ruling at least demonstrates that what many always thought about precious metals futures price discovery as being rigged and manipulated is in fact correct. As well as the $25 million fine, Merrill entered into a non-persecution agreement with the US Department of Justice (DoJ), agreed to cooperate with the DoJ investigation into criminal violations, paid a $11.5 million civil monetary penalty to the CFTC, and had indictments against two of its former MLCI precious metals traders, Edward Bases and John Pacilio.

UBS – Precious Metals Spoofers

The Usual Suspects – UBS, HSBC and Deutsche

But the recent case against Merrill is not an isolated event. It follows similar moves by the CFTC in early 2018 where the CFTC chargedinvestment banks UBS, Deutsche Bank and HSBC and a number of their traders for spoofing precious metals futures from as early as 2008, while fining the banks a combined $46.6 million (of which $30 million was levied against Deutsche, and $15 million against HSBC). In those cases, the CFTC worked with the US Department of Justice and the FBI to bring the charges.

Moving forward to this year, in February 2019, the U.S. District Court for the District of Connecticut fined ex UBS precious metals trader Andre Flotron $100,000 for price spoofing and price manipulation in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. In that action, the CFTC found that Flotron had spoofed large orders in the precious metals markets between “at least August 2008 through at least November 2013, while employed at UBS”. This followed the CFTC reopening the case against Flotron in December 2018.

For excellent insights into how these UBS and other investment bank traders operated their spoofing, see the articles by Allan Flynn from April 2018 titled “US Gold and Silver Futures Markets – ‘Easy Targets’” and “UBS and Deutsche Bank gold and silver traders, April 2018”. For example, in evidence at the Flotron trial, Mike Chan, a UBS junior trader to Flotron while they worked in Singapore stated to the court that “during training, I’d seen him spoof and –  enough that I replicated it immediately to do the same thing. And as my career progressed at UBS, the more traders I interact with, the more people I’ve seen spoof.

The Fix is In – Manipulating the Gold and Silver Benchmarks

Beyond the gold and silver futures markets, but interfacing with the futures, a similar group of bullion bank traders are, not surprisingly, also involved in antitrust court cases alleging that these banks manipulated the London gold and silver fixing benchmark auction prices. While these cases are still winding their way through New York courts, and have not yet been fully ruled on, the chat room transcripts on manipulative price collusion can only be described as shocking, chat transcripts which anyone who bothered to think about it knew they existed from at least 2004.

The cases in question have been brought by groups of precious metals investors against the cartelesque London Gold Fixing and London Silver Fixing companies with allegations that Bank of Nova Scotia and HSBC manipulated silver fixing prices from 2007 to 2013, and that ScotiaBank, HSBC, Barclays and Societe Generale manipulated fixing prices from 2004 to 2013. Noticeably absent is Deutsche Bank which settled its way out of both cases, and UBS which successfully dismissed itself from both cases using cooperation and expensive lawyers.

Again we turn to an article by Allan Flynn from December 2016 titled “How to Trigger a Silver Avalanche by a Pebble: ‘Smash(ed) it Good’ which has a host of excellent quotes from chat room transcripts on how traders allegedly manipulated the silver market, for example:

UBS Trader A: “gonna bend this silver lower”; “i will bend it lower told u”; ”hah cool its gonna get ugly”; “use the blade on silver rg tnow it’ll hold it up”, gona blade silver now.

Deutsche Bank Trader B instructing Barclays trader A: “today u smash,

UBS Trader A: “an avalanche can be triggered by a pebble if you get the timing right” and “silver still here, u can easily manipulate silver”

With the cases against the London Gold and Silver Fixing companies still in discovery in the New York courts, expect further revelations later this year, but given the leniency of the system, not a lot of penalties.

For those readers alert to the way trading of precious metals futures contracts and trading around the London gold and silver fixes works, you will see that the pushing around of prices occurs in both ‘venues’, on COMEX and in the London gold and silver market, especially in the lead up to and during the fixes.

The same investment bank precious metals traders trade gold and silver futures contracts and London OTC contracts, and they trade these in the London and COMEX ‘venues’ at the same time. Price movements in one location instantly are reflected in the other. This is all explained in the BullionStar article “Spoofing Futures and Banging Fixes: Same Banks, Same Trading Desks” from April 2018. At the time I said the following, which is even more apt now given the CFTC’s recent prosecution of Merrill Lynch Commodities Inc (MLCI):

Prosecuting banks and traders for price manipulation on COMEX futures while ignoring the far larger London market and its gold and silver fixings looks like a job half done. Trading desks and their traders are agnostic to trading venues and with interlinked markets, the COMEX and the London Fixings are two sides of the same coin.”

Who needs real metal when you can trade 'Screen' gold and silver?

Conclusion – The Greatest Trick ever Pulled

Manipulating gold and silver prices by spoofing futures trades and cancelling them is one thing. Central bank intervention into physical gold markets to dampen the gold price is another. But perhaps the most far reaching yet unappreciated method of manipulation is sitting there in plain sight, and that is the very structure of the contemporary ‘gold’ and ‘silver’ markets where prices are established by trading in vast quantities of fractionally-backed synthetic gold and silver credit, be it in the form of vast quantities of unallocated positions that are ‘gold’ or ‘silver’ in name only, or in the form of gold and silver futures which haven’t the slightly connection with CME approved precious metals vaults and warehouses.

By siphoning off demand for real gold and silver and channeling it into unbacked or fractionally-backed credits and futures, the central banks and their bullion bank counterparts have done an amazing job in creating an entire market structure of futures and synthetics trading that is unconnected to the physical gold and silver markets. This structure siphons off demand away from the physical precious metals markets, and in doing so, creates a system of price discovery which is nothing to do with physical gold and silver supply and demand.

Apart from fractional-reserve banking, precious metals market structure is perhaps one of the biggest cons on the planet. So next time you think of precious metals manipulation, remember that in addition to spoofing and secretive central bank gold loans, the entire structure of the precious metals markets is unfortunately one big manipulation hiding in plain sight.

This article was originally published on the BullionStar.com website under the same title "Gold & Silver Price Manipulation - The Greatest Trick ever Pulled".

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